Who Was Responsible for Protecting the St. Joseph Pension Fund?

Wednesday, August 30, 2017


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St. Joseph retirees are facing a 40% cut to their pensions

It is less than two weeks since the St. Joseph Health Services pension fund filed for bankruptcy, but a GoLocal investigation has unveiled that those empowered to protect the pension fund — elected officials, the Diocese of Providence, board members of various healthcare entities, and paid consultants — did little to properly fund, protect, and salvage the retirement fund for nearly 3,000 present and former employees of the hospital.

Equally disturbing, no one warned the retirees. They learned of the bankruptcy when GoLocal wrote the first story on August 18, 2017.


As early as the mid-2000s, while the pension fund was under the sole control of the Diocese of Providence, the Diocese began to cut back the necessary contributions and in some years made no contribution.

The board of the hospital for decades was a collection of some of Rhode Island’s most powerful. Former Speaker of the House Matt Smith, former Governor Joe Garrahy, former Supreme Court Justice Joseph R. Weisberger, and developer Joe DiStefano all served on the board in the period of time when the hospital was running up huge debts --  and the contributions to the pension were being cut.

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Attorney General Peter Kilmartin

The board members were not properly briefed, looked away or failed to understand the gravity of the situation.

In 2009, Our Lady of Fatima and St. Joseph Hospital were merged with Roger Williams Medical Center — creating a bigger, but not much more fiscally viable, healthcare group. In 2014, the hospitals were sold to Prospect of California’s CharterCARE.  

Hospital Conversion Act

The sale of all hospitals must be reviewed by two state agencies. The Rhode Island Department of Health has the responsibility to review how the care of patients will be impacted.

The top law enforcement officer of the state of Rhode Island - in the case of this deal, Peter Kilmartin - is statutorily assigned the responsibility of protecting the employees in the transaction. In this case, Kilmartin seems to have failed in that role.

The Attorney General is the backstop, and he failed to review or assess basic financial documents as they related to the pension fund.

GoLocal breakdowns the layers of oversight and their collective responsibilities to review the status of the pension fund and its financial health. 


Related Slideshow: Who Was Responsible for Protecting the St. Joseph Pension Fund?

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Attorney General Peter Kilmartin

The Attorney General has the sole responsibility under RI's Hospital Conversion Act to protect the employees of a healthcare facility during a transaction.

At the time of the agreement in 2014, Kilmartin said, “The transacting parties have worked diligently to provide regulators with the necessary documentation and information throughout this review process to make this decision, a decision I believe is in the best interest of Rhode Island’s healthcare marketplace, the community, the employees, and most importantly, the patients.”

Kilmartin said in his statement, “Conducting a hospital conversion review requires the commitment of a substantial amount of resources for the Office of Attorney General. I commend my staff for the time and careful consideration put into this review process.” 

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Diocese of Providence - Bishop Tobin

The Diocese of Providence has repeatedly refused to respond to questions regarding the bankruptcy of the St. Joseph pension fund.

Bishop Thomas Tobin chaired the Board of Trustees in 2008 during the period in which the hospital merged with Roger Williams Medical Center.

For nearly a decade and under the auspices of the Tobin-led Diocese, contributions to the pension fund were either only a fraction of what was needed or not made at all. 

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Board of St. Joseph Hospital - Prior to Merger

When the hospital was independent, its board was comprised of many of RI's most influential.  Here they are. 

Board of Trustees

Revised: May 2008

Most Reverend Thomas J. Tobin, D.D.
Chairman & Treasurer

Reverend Monsignor William I. Varsanyi, J.C.D.

Mr. John M. Fogarty
President / CEO

Mary L. Burke, R.N.

Mr. Frederick K. Butler

Steven Colagiovanni, M.D.

Karen DelPonte, Esq.

Joseph R. DiStefano, Esq.

Mr. Jeffrey R. Massotti

Joseph P. Mazza, M.D.

Mr. Marshall Raucci, Jr.

Ms. Nancy E. Rogers

Daniel J. Ryan, CPA

Joseph Samartano, Jr., DDS

Ms. D. Faye Sanders

Mr. Matthew J. Smith

Mr. Kevin P. Stiles

Reverend Monsignor Paul D. Theroux, J.C.L.

Honorable Joseph R. Weisberger

Honorary Trustees

Honorable J. Joseph Garrahy

Most Reverend Louis E. Gelineau, D.D.

Most Reverend Salvatore R. Matano

Most Reverend Robert E. Mulvee, D.D., J.C.D.

Rita Murphy, R.N.

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Board of St. Joseph Health Services - Post Merger

Three years of actuarial reports provided to GoLocal from court-appointed receiver Stephen Del Sesto show that the board of the orphaned pension fund was provided clear information that the pension fund was insufficiently funded.

The Board never warned retirees and waited until the fund was so deficient that retirees may be forced to take a 40 percent cut to their benefits.


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